U.S. prosecutors informed a judge on Tuesday that Ilya Lichtenstein should serve five years in prison for his involvement in the 2016 breach of the crypto exchange Bitfinex.
In August, Lichtenstein and his wife, Heather Morgan, also known as “Razzlekhan,” entered a guilty plea to money laundering charges in connection with the hack. They are scheduled to be sentenced next month.
U.S. prosecutors sought a 60-month (five-year) prison sentence for Ilya Lichtenstein, followed by three years of supervised release, in connection with money laundering charges stemming from the 2016 breach of the crypto exchange Bitfinex.
According to a sentencing memorandum submitted to the United States District Court for the District of Columbia on Tuesday, the U.S. government is requesting a sentence that is less than the advisory guidelines of 121-151 months, despite the fact that the defendant has participated in prior cyber criminal activities prior to the Bitfinex hack. This is due to the defendant’s cooperation in the case and his assistance in other investigations beyond his own. For instance, during a trial earlier this year, Lichtenstein provided testimony against the operator of the cryptocurrency aggregator Bitcoin Fog.
The filing indicates that Lichtenstein would still serve a substantially greater amount of time in prison than his wife and co-conspirator, Heather Morgan, due to his primary responsibility for the Bitfinex intrusion. Last week, prosecutors recommended an 18-month sentence for Morgan, a rapper also known as “Razzlekhan,” in light of her minor role in assisting Lichtenstein in the launder of funds after she discovered that he was responsible for the attack.
Nevertheless, prosecutors asserted that a severe sentence for Lichtenstein would assist in “breaking the cycle” of young cybercriminal defendants who develop exceptional technical skills from a young age, but who experience social isolation and seek out online communities. “They are subjected to criminal activity in those online spaces, and the activity is normalized in a manner that trivializes the impact on the victims,” prosecutors informed a federal magistrate.
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